archive.today webpage capture | Saved from | ||
| All snapshots | from host www.irs.gov | ||
| WebpageScreenshot | |||
| 1. | Enter the total amount of any scholarship or fellowship grant for 2016. See Amount of scholarship or fellowship grant, earlier. | 1. | ||
|
||||
| 2. | Enter the amount from line 1 that was for teaching, research, or any other services required as a condition for receiving the scholarship. Don't include amounts received for these items under the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program, or a comprehensive student work-learning-service program (as defined in section 448(e) of the Higher Education Act of 1965) operated by a work college (as defined in that section). | 2. | ||
| 3. | Subtract line 2 from line 1 | 3. | ||
| 4. | Enter the amount from line 3 that your scholarship or fellowship grant required you to use for other than qualified education expenses | 4. | ||
| 5. | Subtract line 4 from line 3 | 5. | ||
| 6. | Enter the amount of your qualified education expenses | 6. | ||
| 7. | Enter the smaller of line 5 or line 6. This amount is the most you can exclude from your gross income (the tax-free part of the scholarship or fellowship grant) | 7. | ||
| 8. | Subtract line 7 from line 5 | 8. | ||
| 9. | Taxable part. Add lines 2, 4, and 8. See Reporting Scholarships and Fellowship Grants , earlier, for how to report this amount on your tax return | 9. |
| Maximum credit | Up to $2,500 credit per eligible student |
| Limit on modified adjusted gross income (MAGI) | $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er) |
| Refundable or nonrefundable | 40% of credit may be refundable; the rest is nonrefundable |
| Number of years of postsecondary education | Available ONLY if the student had not completed the first 4 years of postsecondary education before 2016 (generally, the freshman through senior years, determined by the eligible educational institution, not including academic credit awarded solely because of the student's performance on proficiency examinations) |
| Number of tax years credit available | Available ONLY for 4 tax years per eligible student (including any year(s) Hope scholarship credit was claimed) |
| Type of program required | Student must be pursuing a program leading to a degree or other recognized education credential |
| Number of courses | Student must be enrolled at least half-time for at least one academic period that begins during 2016 (or the first 3 months of 2017 if the qualified expenses were paid in 2016) |
| Felony drug conviction | As of the end of 2016, the student had not been convicted of a felony for possessing or distributing a controlled substance |
| Qualified expenses | Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance |
| Payments for academic periods | Payments made in 2016 for academic periods beginning in 2016 or beginning in the first 3 months of 2017 |
| IF you... | THEN only... |
| claim an exemption on
your tax return for a dependent who is an eligible student |
you can claim the American opportunity credit based on that dependent's expenses. The dependent can't claim the credit. |
| don't claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) | the dependent can claim the American opportunity credit. You can't claim the credit based on this dependent's expenses. |
| 1. | Enter your adjusted gross income
(Form 1040, line 38) |
1. | |||||
| 2. | Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) | 2. | |||||
| 3. | Enter your foreign housing deduction (Form 2555, line 50) | 3. | |||||
| 4. | Enter the amount of income from Puerto Rico you are excluding | 4. | |||||
| 5. | Enter the amount of income from American Samoa you are excluding (Form 4563, line 15) | 5. | |||||
| 6. | Add the amounts on
lines 2, 3, 4, and 5 |
6. | |||||
| 7. | Add the amounts on lines 1 and 6.
This is your modified adjusted gross income. Enter here and on Form 8863, line 3 |
7. | |||||
| $2,500 | × | $180,000 − $165,000 | = | $1,875 | ||
| $20,000 |
| Maximum credit | Up to $2,000 credit per return | ||
| Limit on modified adjusted gross income (MAGI) | $131,000 if married filling jointly;
$65,000 if single, head of household, or qualifying widow(er) |
||
| Refundable or nonrefundable | Nonrefundable—credit limited to the amount of tax you must pay on your taxable income | ||
| Number of years of postsecondary education | Available for all years of postsecondary education and for courses to acquire or improve job skills | ||
| Number of tax years credit available | Available for an unlimited number of tax years | ||
| Type of program required | Student doesn't need to be pursuing a program leading to a degree or other recognized education credential | ||
| Number of courses | Available for one or more courses | ||
| Felony drug conviction | Felony drug convictions don't make the student ineligible | ||
| Qualified expenses | Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) | ||
| Payments for academic periods | Payments made in 2016 for academic periods beginning in 2016 or beginning in the first 3 months of 2017 |
| IF you... | THEN only... |
| claim an exemption on your tax return for a dependent who is an eligible student | you can claim the lifetime learning credit based on that dependent's expenses. The dependent can't claim the credit. |
| don't claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) | the dependent can claim the lifetime learning credit. You can't claim the credit based on this dependent's expenses. |
| 1. | Enter your adjusted gross income
(Form 1040, line 38) |
1. | |||||
| 2. | Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) | 2. | |||||
| 3. | Enter your foreign housing deduction (Form 2555, line 50) | 3. | |||||
| 4. | Enter the amount of income from Puerto Rico you are excluding | 4. | |||||
| 5. | Enter the amount of income from American Samoa you are excluding (Form 4563, line 15) | 5. | |||||
| 6. | Add the amounts on
lines 2, 3, 4, and 5 |
6. | |||||
| 7. | Add the amounts on lines 1 and 6.
This is your modified adjusted gross income. Enter this amount on Form 8863, line 14 |
7. | |||||
| $1,320 | × | $131,000 − $112,000 | = | $1,254 | ||
| $20,000 |
This table summarizes the features of the student loan interest deduction. Don't rely on this table alone. Refer to the text for more details. |
| Feature | Description | |
|---|---|---|
| Maximum benefit | You can reduce your income subject to tax by up to $2,500. | |
| Loan qualifications | Your student loan:
• must have been taken out solely to pay qualified education expenses, and • can't be from a related person or made under a qualified employer plan. |
|
| Student qualifications | The student must be:
• you, your spouse, or your dependent; and • enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution. |
|
| Limit on modified adjusted gross income (MAGI) | $160,000 if married filing a joint return;
$80,000 if single, head of household, or qualifying widow(er). |
| Payment Date | Payment | Stated Interest | Principal | |||
| November 2016 | $200.51 | $44.27 | $156.24 | |||
| December 2016 | $200.51 | $43.62 | $156.89 | |||
| Totals | $401.02 | $87.89 | $313.13 |
| IF your filing status is... | AND your MAGI is... | THEN your student loan interest deduction is... |
| single,
head of household, or qualifying widow(er) |
not more than $65,000 | not affected by the phaseout. |
| more than $65,000
but less than $80,000 |
reduced because of the phaseout. | |
| $80,000 or more | eliminated by the phaseout. | |
| married filing joint return | not more than $130,000 | not affected by the phaseout. |
| more than $130,000
but less than $160,000 |
reduced because of the phaseout. | |
| $160,000 or more | eliminated by the phaseout. |
| $800 | × |
$145,000 − $130,000
$30,000 |
= | $400 |
| $2,500 | × |
$145,000 − $130,000
$30,000 |
= | $1,250 |
Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Before using this worksheet, you must complete Form 1040,lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. |
| 1. | Enter the total interest you paid in 2016 on qualified student loans.
Don't enter
more than $2,500 |
1. | ||||||
| 2. | Enter the amount from Form 1040, line 22 | 2. | ||||||
| 3. | Enter the total of the amounts from Form 1040,
lines 23 through 32 |
3. | ||||||
| 4. | Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 | 4. | ||||||
| 5. | Add lines 3 and 4 | 5. | ||||||
| 6. | Subtract line 5 from line 2 | 6. | ||||||
| 7. | Enter any foreign earned income exclusion and/or housing
exclusion (Form 2555, line 45; or Form 2555-EZ, line 18) |
7. | ||||||
| 8. | Enter any foreign housing deduction (Form 2555, line 50) | 8. | ||||||
| 9. | Enter the amount of income from Puerto Rico you are excluding | 9. | ||||||
| 10. | Enter the amount of income from American Samoa you are
excluding (Form 4563, line 15) |
10. | ||||||
| 11. | Add lines 6 through 10. This is your modified adjusted gross income | 11. | ||||||
| 12. | Enter the amount shown below for your filing status | 12. | ||||||
| • Single, head of household, or qualifying widow(er)—$65,000 | ||||||||
| • Married filing jointly—$130,000 | ||||||||
| 13. | Is the amount on line 11 more than the amount on line 12? | |||||||
| □ | No. Skip lines 13 and 14, enter -0- on line 15, and go to line 16. | |||||||
| □ | Yes. Subtract line 12 from line 11 | 13. | ||||||
| 14. | Divide line 13 by $15,000 ($30,000 if married filing jointly). Enter the result as a decimal
(rounded to at least three places). If the result is 1.000 or more, enter 1.000 |
14. | . | |||||
| 15. | Multiply line 1 by line 14 | 15. | ||||||
| 16. |
Student loan interest deduction.
Subtract line 15 from line 1. Enter the result here and on Form 1040, line 33. Don't include this amount in figuring any other deduction on your return (such as on Schedule A, C, E, etc.) |
16. | ||||||
Don't rely on this table alone. Refer to the text for complete details. |
| Question | Answer |
| What is the maximum benefit? | You can reduce your income subject to tax by up to $4,000. |
| What is the limit on modified adjusted gross income (MAGI)? | $160,000 if married filing a joint return;
$80,000 if single, head of household, or qualifying widow(er). |
| Where is the deduction taken? | As an adjustment to income on
Form 1040 or Form 1040A. |
| For whom must the expenses be paid? | A student enrolled in an eligible educational institution who is either:
• you, • your spouse, or • your dependent for whom you claim an exemption. |
| What tuition and fees are deductible? | Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board. |
| IF your dependent is an eligible student and you... | AND... | THEN... |
| claim an exemption for your dependent | you paid all qualified education expenses for your dependent | only you can deduct the qualified education expenses that you paid. Your dependent can't take a deduction. |
| claim an exemption for your dependent | your dependent paid all qualified education expenses | no one is allowed to take a deduction. |
| don't claim an exemption for your dependent | you paid all qualified education expenses | no one is allowed to take a deduction. |
| don't claim an exemption for your dependent | your dependent paid all qualified education expenses | no one is allowed to take a deduction. |
| IF your filing status is... | AND your MAGI is... | THEN your maximum tuition and fees deduction is... |
| single,
head of household, or qualifying widow(er) |
not more than $65,000 | $4,000. |
| more than $65,000
but not more than $80,000 |
$2,000. | |
| more than $80,000 | $0. | |
| married filing joint return | not more than $130,000 | $4,000. |
| more than $130,000
but not more than $160,000 |
$2,000. | |
| more than $160,000 | $0. |
Use this worksheet if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Before using this worksheet, you must complete Form 1040, lines 7 through 33, and figure any amount to be entered on the dotted line next to line 36. |
| 1. | Enter the amount from Form 1040, line 22 | 1. | ||||||||
| 2. | Enter the total from Form 1040, lines 23 through 33 | 2. | ||||||||
| 3. | Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 | 3. | ||||||||
| 4. | Add lines 2 and 3 | 4. | ||||||||
| 5. | Subtract line 4 from line 1 | 5. | ||||||||
| 6. | Enter your foreign earned income exclusion and/or housing
exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) |
6. | ||||||||
| 7. | Enter your foreign housing deduction (Form 2555, line 50) | 7. | ||||||||
| 8. | Enter the amount of income from Puerto Rico you are excluding | 8. | ||||||||
| 9. | Enter the amount of income from American Samoa you are
excluding (Form 4563, line 15) |
9. | ||||||||
| 10. | Add lines 5 through 9. This is your modified adjusted gross income | 10. | ||||||||
| Note. If the amount on line 10 is more than $80,000 ($160,000 if married filing jointly), you can't take the deduction for tuition and fees. | ||||||||||
Don't rely on this table alone. It provides only general highlights. See the text for definitions of terms and for more complete explanations. |
| Question | Answer |
| What is a Coverdell ESA? | A savings account that is set up to pay the qualified education expenses of a designated beneficiary. |
| Where can it be established? | It can be opened in the United States at any bank or other IRS-approved entity that offers Coverdell ESAs. |
| Who can have a Coverdell ESA? | Any beneficiary who is under age 18 or is a special needs beneficiary. |
| Who can contribute to a Coverdell ESA? | Generally, any individual (including the beneficiary) whose modified adjusted gross income for the year is less than $110,000 ($220,000 in the case of a joint return). |
| Are distributions tax free? | Yes, if the distributions aren't more than the beneficiary's adjusted qualified education expenses for the year. |
Don't rely on this table alone. It provides only general highlights. See the text for more complete explanations. |
| Question | Answer |
| Are contributions deductible? | No. |
| What is the annual contribution limit per designated beneficiary? | $2,000 for each designated beneficiary. |
| What if more than one Coverdell ESA has been opened for the same designated beneficiary? | The annual contribution limit is $2,000 for each beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. |
| What if more than one individual makes contributions for the same designated beneficiary? | The annual contribution limit is $2,000 per beneficiary, no matter how many individuals contribute. |
| Can contributions other than cash be made to a Coverdell ESA? | No. |
| When must contributions stop? | No contributions can be made to a beneficiary's Coverdell ESA after he or she reaches age 18, unless the beneficiary is a special needs beneficiary. |
| 1. | Enter your adjusted gross income
(Form 1040, line 38) |
1. | |||||
| 2. | Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) | 2. | |||||
| 3. | Enter your foreign housing deduction (Form 2555, line 50) | 3. | |||||
| 4. | Enter the amount of income from Puerto Rico you are excluding | 4. | |||||
| 5. | Enter the amount of income from American Samoa you are excluding (Form 4563, line 15) | 5. | |||||
| 6. | Add lines 2, 3, 4, and 5 | 6. | |||||
| 7. | Add lines 1 and 6. This is your modified adjusted gross income | 7. | |||||
| 1. | Maximum contribution | 1. | $ 2,000 | ||||
| 2. | Enter your modified adjusted gross income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1) | 2. | |||||
| 3. | Enter $190,000 if married filing jointly; $95,000 for all other filers | 3. | |||||
| 4. | Subtract line 3 from line 2. If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8 | 4. | |||||
| 5. | Enter $30,000 if married filing jointly; $15,000 for all other filers | 5. | |||||
| Note. If the amount on line 4 is greater than or equal to the amount on line 5, stop here. You aren't allowed to contribute to a Coverdell ESA for 2016. | |||||||
| 6. | Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places) | 6. | . | ||||
| 7. | Multiply line 1 by line 6 | 7. | |||||
| 8. | Subtract line 7 from line 1 | 8. | |||||
| Note. The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. | |||||||
| 1. | Maximum contribution | 1. | $ 2,000 | ||||
| 2. | Enter your modified adjusted gross
income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1) |
2. | 96,500 | ||||
| 3. | Enter $190,000 if married filing jointly; $95,000 for all other filers | 3. | 95,000 | ||||
| 4. | Subtract line 3 from line 2. If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8 | 4. | 1,500 | ||||
| 5. | Enter $30,000 if married filing jointly; $15,000 for all other filers | 5. | 15,000 | ||||
|
Note.
If the amount on line 4 is greater than or equal to the amount on line 5,
stop here. You aren't allowed to contribute to a Coverdell ESA for 2016. |
|||||||
| 6. | Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places) | 6. | .100 | ||||
| 7. | Multiply line 1 by line 6 | 7. | 200 | ||||
| 8. | Subtract line 7 from line 1 | 8. | 1,800 | ||||
| Note.The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. | |||||||
| (1) | $500 excess contributions made in 2016 | |||
| + (2) | $300 excess contributions in ESA at end of 2015 | |||
| − (2a) | $250 distribution during 2016 | |||
| $550 excess at end of 2016 | × 6% = $33 | |||
Don't rely on this table alone. It provides only general highlights. See the text for definitions of terms and for more complete explanations. |
| 1. | $850 (distribution) | × |
$1,500 basis + $0 contributions
$950 value + $850 distribution |
||||
| = $708 (basis portion of distribution) | |||||||
| 2. | $850 (distribution) − $708 (basis portion of distribution) | ||||||
| = $142 (earnings included in distribution) | |||||||
| 3. | $142 (earnings) | × |
$700 AQEE
$850 distribution |
||||
| = $117 (tax-free earnings) | |||||||
| 4. | $142 (earnings) − $117 (tax-free earnings) | ||||||
| = $25 (taxable earnings) | |||||||
| Partial tuition scholarship (tax free) | $1,500 | ||
| Coverdell ESA distribution | 1,000 | ||
| Gift from parents | 2,100 | ||
| Earnings from part-time job | 1,200 | ||
| Total qualified higher education expenses | $5,800 | ||
| Minus: Tax-free educational assistance | −1,500 | ||
| Minus: Expenses taken into account in
figuring American opportunity credit |
− 4,000 | ||
| Equals: Adjusted qualified higher education
expenses (AQHEE) |
$ 300 | ||
| 1. | $1,000 (distribution) | × |
$2,100 basis + $400 contributions
$1,800 value + $1,000 distribution |
||||
| = $893 (basis portion of distribution) | |||||||
| 2. | $1,000 (distribution) − $893 (basis portion of distribution) | ||||||
| = $107 (earnings included in distribution) | |||||||
| 3. | $107 (earnings) | × |
$300 AQHEE
$1,000 distribution |
||||
| = $32 (tax-free earnings) | |||||||
| 4. | $107 (earnings) − $32 (tax-free earnings) | ||||||
| = $75 (taxable earnings) | |||||||
| $3,000 QHEE | × |
$800 ESA distribution
$4,000 total distribution |
= | $600
QHEE (ESA) |
| $3,000 QHEE | × |
$3,200 QTP distribution
$4,000 total distribution |
= | $2,400
QHEE (QTP) |
| Line G. | Enter the total distributions received from all Coverdell ESAs during 2016. Don't include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). Also, don't include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year for which the contributions were made. |
| Line 2. | Your basis (amount already taxed) in this Coverdell ESA as of December 31, 2015, is the total of: |
|
• All contributions to this Coverdell ESA before 2016 • Minus the tax-free portion of any distributions from this Coverdell ESA before 2016. |
|
| If your last distribution from this Coverdell ESA was before 2016, you must start with the basis in your account as of the end of the last year in which you took a distribution. For years before 2002, you can find that amount on the last line of the worksheet in the Instructions for Form 8606, Nondeductible IRAs, that you completed for that year. For years after 2001, you can find that amount by using the ending basis from the worksheet in Pub. 970 for that year. You can determine your basis in this Coverdell ESA as of December 31, 2015, by adding to the basis as of the end of that year any contributions made to that account after the year of the distribution and before 2016. | |
| Line 4. | Enter the total distributions received from this Coverdell ESA in 2016. Don't include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). |
| Also, don't include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year of the contributions. | |
| Line 7. | Enter the total value of this Coverdell ESA as of December 31, 2016, plus any outstanding rollovers contributed to the account after 2015, but before the end of the 60-day rollover period. A statement should be sent to you by January 31, 2017, for this Coverdell ESA showing the value on December 31, 2016. |
| A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. An outstanding rollover is any amount withdrawn within 60 days before the end of 2016 (November 2 through December 31) that was rolled over after December 31, 2016, but within the 60-day rollover period. |
| Gift from parents | $1,600 | ||
| Partial tuition scholarship (tax free) | 3,100 | ||
| QTP distribution | 5,300 | ||
| Total qualified education expenses | $8,300 | ||
| Minus: Tax-free educational assistance | −3,100 | ||
| Equals: Adjusted qualified
education expenses (AQEE) |
$5,200 |
| 1. | $950 (earnings) | × | $5,200 AQEE | ||||
|
$5,300 distribution | |||||||
| = $932 (tax-free earnings) | |||||||
| 2. | $950 (earnings) − $932 (tax-free earnings) | ||||||
|
= $18 (taxable earnings) |
|||||||
| Total qualified education expenses | $8,300 | ||
| Minus: Tax-free educational assistance | − 3,100 | ||
| Minus: Expenses taken into account
in figuring American opportunity credit |
− 4,000 | ||
| Equals: Adjusted qualified
education expenses (AQEE) |
$1,200 | ||
| 1. | $950 (earnings) | × |
$1,200 AQEE
$5,300 distribution |
||||
| = $215 (tax-free earnings) | |||||||
| 2. | $950 (earnings) − $215 (tax-free earnings) | ||||||
| = $735 (taxable earnings) | |||||||
| $1,200 AQHEE | × |
$700 ESA distribution
$5,300 total distribution |
= | $158
AQHEE (ESA) |
| $1,200 AQHEE | × |
$4,600 QTP distribution
$5,300 total distribution |
= | $1,042
AQHEE (QTP) |
| Employer-provided educational assistance
(tax free) |
$5,000 | ||
| Early distribution from IRA
(taxable part is $500) |
3,200 | ||
| Total qualified education expenses | $5,800 | ||
| Minus: Tax-free educational assistance | −5,000 | ||
| Equals: Adjusted qualified
education expenses (AQEE) |
$ 800 |
| $3,000
interest |
× | $7,650 AQEE | = | $2,550
tax-free interest |
||
| $9,000 proceeds |
| 1. | $425 meal expenses | = | 0.17 | |
| $2,500 total expenses |
| 2. | $2,000 (reimbursement) × 0.17 | |||||||
| = $340 (allocated reimbursement for meal expenses) | ||||||||
| 3. | $2,000 (reimbursement) − $340 (meals) | ||||||
| = | $1,660 (allocated reimbursement for other qualifying work-related education expenses) | ||||||
| Lodging | $1,050 | |||
| Meals | 526 | |||
| Airfare | 550 | |||
| Taxi fares | 50 | |||
| Tuition and books | 400 | |||
| Total Expenses | $2,576 |
| Adjusted Qualified Education Expenses Worksheet (Form 8863 instructions) | ||||||
| 1. | Total qualified education expenses paid for or on behalf of the student in 2016 for the academic period | 10,500 | ||||
| 2. | Less adjustments: | |||||
| a. | Tax-free educational assistance received in 2016 allocable to the academic period | 2,000 | ||||
| b. | Tax-free educational assistance received in 2017 (and before you file your 2016 tax return) allocable to the academic period | 0 | ||||
| c. | Refunds of qualified education expenses paid in 2016 if the refund is received in 2016 or in 2017 before you file your 2016 tax return | 0 | ||||
| 3. | Total adjustments (add lines 2a, 2b, and 2c) | 2,000 | ||||
| 4. | Adjusted qualified education expenses. Subtract line 3 from line 1. If zero or less, enter -0- | 8,500 | ||||
| Adjusted Qualified Education Expenses Worksheet (Form 8863 instructions) | ||||||
| 1. | Total qualified education expenses paid for or on behalf of the student in 2016 for the academic period | 7,000 | ||||
| 2. | Less adjustments: | |||||
| a. | Tax-free educational assistance received in 2016 allocable to the academic period | 0 | ||||
| b. | Tax-free educational assistance received in 2017 (and before you file your 2016 tax return) allocable to the academic period | 0 | ||||
| c. | Refunds of qualified education expenses paid in 2016 if the refund is received in 2016 or in 2017 before you file your 2016 tax return | 0 | ||||
| 3. | Total adjustments (add lines 2a, 2b, and 2c) | 0 | ||||
| 4. | Adjusted qualified education expenses. Subtract line 3 from line 1. If zero or less, enter -0- | 7,000 | ||||
| Complete this worksheet to figure the amount to enter on line 19. | ||||||
| 1. | Enter the amount from Form 8863, line 18 | 1. | 700 | |||
| 2. | Enter the amount from Form 8863, line 9 | 2. | 1,500 | |||
| 3. | Add lines 1 and 2 | 3. | 2,200 | |||
| 4. | Enter the amount from:
|
4. | 1,003 | |||
| 5. | Enter the amount from either:
|
5. | 0 | |||
| 6. | Subtract line 5 from line 4 | 6. | 1,003 | |||
| 7. | Enter the smaller of line 3 or line 6 here and on Form 8863, line 19 | 7. | 1,003 | |||
This chart highlights some differences among the benefits discussed in this publication. See the text for definitions and details.Don't rely on this chart alone. |
| Scholarships,
Fellowship Grants, Grants, and Tuition Reductions |
American Opportunity Credit | Lifetime Learning Credit | Student Loan Interest Deduction | Tuition and Fees Deduction | Coverdell ESA† | Qualified Tuition Program (QTP)† | Education Exception to Additional Tax on Early IRA Distributions† | Education Savings Bond Program† | Employer-
Provided Educational Assistance† |
Business Deduction for Work-Related Education | |
| What is your
benefit? |
Amounts received may not be taxable
|
Credits can reduce the amount of tax you must pay.
40% of the credit may be refundable (limited to $1,000 per student). |
Credits can reduce the amount of tax you must pay | Can deduct interest paid | Can deduct expenses | Earnings not
taxed |
Earnings not taxed | No 10%
additional tax on early distribution |
Interest not taxed | Employer benefits not taxed | Can deduct expenses |
| What is the annual limit? | None | $2,500 credit per student | $2,000 credit per tax return
|
$2,500 deduction | $4,000 deduction | $2,000 contribution per beneficiary | None | Amount of qualified
education expenses |
Amount of qualified
education expenses |
$5,250 exclusion | Amount of qualifying work-related education expenses |
| What expenses
qualify besides tuition and required enrollment fees? |
Course-related expenses such as fees, books, supplies, and equipment | Course-related books, supplies, and equipment | Amounts paid for required books, etc., that must be paid to the educational institution, are required fees | Books
Supplies Equipment Room & board Transportation Other necessary expenses |
None | Books
Supplies Equipment Expenses for special needs services Payments to QTP Higher education: Room & board if at least half-time student Elem/sec (K–12) education: Tutoring Room & board Uniforms Transportation Computer access Supplementary expenses |
Books
Supplies Equipment Room & board if at least half-time student Computer or peripheral equipment, computer software, or Internet access and related services Expenses for special needs services |
Books
Supplies Equipment Room & board if at least half-time student Expenses for special needs services |
Payments to Coverdell ESA
Payments to QTP |
Books
Supplies Equipment |
Transportation
Travel Other necessary expenses |
| Scholarships,
Fellowship Grants, Grants, and Tuition Reductions |
American Opportunity Credit | Lifetime Learning Credit | Student Loan Interest Deduction | Tuition and Fees Deduction | Coverdell ESA† | Qualified Tuition Program (QTP)† | Education Exception to Additional Tax on Early IRA Distributions† | Education Savings Bond Program† | Employer-
Provided Educational Assistance† |
Business Deduction for Work-Related Education | |
| What education qualifies? | Undergraduate & graduate
K–12 |
Undergraduate & graduate | Undergraduate & graduate
Courses to acquire or improve job skills |
Undergraduate & graduate | Undergraduate & graduate | Undergraduate & graduate
K–12 |
Undergraduate & graduate | Undergraduate & graduate | Undergraduate & graduate | Undergraduate & graduate | Required by employer or law to keep present job, salary, status
Maintain or improve job skills |
| What are some of the other
conditions that apply? |
Must be in degree or vocational program
Payment of tuition and required fees must be allowed under the grant |
Can be claimed for only 4 tax years (which includes years Hope scholarship credit claimed)
Must be enrolled at least half-time in degree program No felony drug conviction(s) Must not have completed first 4 years of postsecondary education before end of preceding tax year. |
No other conditions | Must have been at least half-time
student in degree program |
Can't claim both deduction & education credit for same student in same year | Assets must be distributed at age 30 unless special
needs beneficiary |
No other conditions | No other conditions | Applies only to qualified series
EE bonds issued after 1989 or series I bonds |
No other conditions | Can't be to
meet minimum educational requirements of present trade/business Can't qualify you for new trade/business |
| In what income
range do benefits phase out? |
No phaseout | $80,000 – $90,000
$160,000 – $180,000 for joint returns |
$55,000 – $65,000
$111,000 – $131,000 for joint returns |
$65,000 – $80,000
$130,000 – $160,000 for joint returns |
$60,000 – $80,000
$130,000 – $160,000 for joint returns |
$95,000 – $110,000
$190,000 – $220,000 for joint returns |
No phaseout | No phaseout | $77,550 – $92,550
$116,300 – $146,300 for joint returns |
No phaseout | No phaseout |
| † Any nontaxable distribution is limited to the amount that doesn't exceed qualified education expenses. | |||||||||||